Auctions have long been held as a way for a seller of a product or service to obtain the highest price for the item they are selling. There are many types of auctions, such as a closed auction, a Dutch auction and an English forward auction. An English forward auction allows bidders to submit successively increasing bids until the auction closes. The bidder holding the highest bid at the close of the auction, wins the offering or item being auctioned. A typical English forward auction begins with the seller setting a reserve price and a minimum bid. The reserve price is the minimum amount the seller will accept in return for the item being offered, and the minimum bid is the smallest increase in a bid a new bidder must make for an item in order for the bid to be accepted by the seller and/or the auction house. Next a bidder makes a bid for the item being offered. If the bid offered meets the minimum bid, that bid will typically be accepted and automatically becomes the current high bid subject to existing proxy bids as explained herein.
After the first bid is accepted, the next bid in an English forward auction will be accepted only if it meets or exceeds the minimum bid. At this point the new bid must at least equal if not exceed the amount of the current high bid plus the amount of the bid increment. For example, if the current high bid is $15,000, and the bid increment is set at $1,000, a bidder must bid at least $16,000 to become the current high bidder. Bids are typically ranked in order of the amount bid. However, if two bidders submit acceptable bids that are equal in amount, the bidder who first submitted the acceptable bid will be awarded the status of current high bidder. Simply because a bidder is the current high bidder when an auction closes does not mean that bidder will necessarily win that auction. Rather the current high bid must also meet or exceed the seller's reserve price in order to win the auction. If the current high bid fails to meet the reserve price when the auction closes, the seller is typically under no obligation to sell that item to that bidder.
An absolute bid is a single, static bid. Therefore, if a second bidder places a bid that is higher than a first bidder's absolute bid, and the second bidder then becomes the current high bidder, the first bidder must manually submit a new acceptable bid in order to become the current high bidder. Alternatively, the auction entity could provide for a proxy feature, which allows the bidder to specify the maximum amount that he is willing to bid for an offering. For example, in an auction where the reserve price is set at $15,000 and the minimum bid is set at $1,000, Bidder B will replace Bidder A (who opened the bidding at $17,000) as the current high bidder if Bidder B bids $18,000.
However, if Bidder A had previously submitted a proxy bid of $35,000, the auction house or auction system will automatically execute a $19,000 bid on behalf of Bidder A. That $19,000 bid represents an amount equal to the current high bid plus the minimum bid, thereby overtaking Bidder B and making Bidder A the current high bidder. Thereafter, each time another bidder properly outbids Bidder A, the auction house or auction system will place another proxy bid on behalf of Bidder A until Bidder A's maximum of $35,000 is reached. In order to thereafter become the current high bidder again, Bidder A would have to manually submit a new bid. However, Bidder A would not know of this need to manually submit a new bid in excess of his proxy maximum unless he was not only monitoring the progress of the bidding, but also continually executed a screen refresh of the auction house or auction system's bid status web page.
Therefore, it would be advantageous to have a system which automatically refreshed a bidder's bid status web page with the current status of the bidding in which any bidder was tracking or participating when either there was a change in the bidding status, or when a bidder's proxy maximum had been outbid or upon expiration of a predetermined time period. It would also be advantageous if the auction house or auction system sent alerts to a bidder who was tracking or bidding on an item being auctioned off, but not monitoring that auction live.
Another problem with current auction systems is that an offering with a larger number of items will not obtain as high a price as possible if the items were offered individually. For example, a car collector owns a large collection of rare cars and desires to sell them via an auction. Because of limited available time the seller could only monitor a single aggregate sale of all the cars. While advantageous in terms of time for the seller, it is not advantageous in terms of maximizing her pricing premium because only bidders with large financial resources can participate in the auction. However, smaller bidders who could bid on one or two items contained in the aggregate offering, could serve to drive up the price of the entire offering if their bids could be accepted as a single bid.
Therefore, it would be advantageous if an auction system existed where a number of similar items could be offered both individually and aggregately, whereby the seller could accept the largest total bid, regardless of whether it came from a single bidder on the aggregate offering, or from the sum of all the individual bidders combined.
In certain automated auction systems, the auction house presents parties interested in the auction of a certain item with the bid history of that offering. The bid history typically displays to the other bidders or to interested parties at least the bidder's name, the amount bid by each bidder and the time the bidder placed their bid. However, by providing all the bidders interested in an offering with information regarding the other parties also interested in that offering, such as their user name or handle, the bidders could collude with each other against the seller. Such collusion results in the seller not receiving the absolute highest possible bid for each item they offered for auction. Therefore, it would be advantageous to have an auction system that allowed the seller or the auction system to block single bidder or all bidders from viewing or receiving any or all information regarding the other bidders bidding on a given offering.
Another problem with current auction systems is that although bidders must log onto an auction system using a log-in name and password, that password is typically not secure. For example, competitors for the same item being auctioned off might somehow determine the password of another competitor. They might then use that password to withdraw their competitor's bid, thereby leaving the unscrupulous bidder with the winning bid. Therefore, it would be advantageous to have an auction system which knows the IP address of a given user, and only grants that user access to the auction system if the user's log-in and password are submitted from a previously registered IP address. Even if the IP address were randomly assigned by the Internet provider it would still be advantageous to track the user by that IP address assigned by the Internet provider for the reasons discussed herein.
Similarly, it would be advantageous to be able to track a user by their IP address or other identifiers assigned by the auction system as the users move throughout the auction web site. Tracking the user through the web site allows the auction house to gather data regarding products of interest to the user, and allows subsequent data mining of the data gathered. Additionally, employing a user's IP address or other identifier to determine their identity and whether they are logging in from a pre-approved location, thereby boosting security for all users and the auction house.
When bidders are interested in bidding on a certain offering or item, they typically log onto the auction system and find their way to the web page detailing that specific offering or item. However, once the user receives that information as it exists at that time, the user is not presented any updated information regarding that offering afterwards. Therefore, if the potential bidder wanted to bid on a selected offering, but wanted to wait until the last possible second to do so, he might be lulled into thinking that a certain bid could successfully win the auction. For example, Bidder D pulls up the web page for Offering #443, and that web page lists the current high bid at $550, and states that the time remaining is 1 minute and 20 seconds. Because the figure displayed as the current high bid is not updated by the auction system, Bidder D might be lulled into thinking it is safe to wait until 5 seconds before the close of the auction on Offering #443 to submit a bid of $560. Unfortunately for Bidder D, other bidders could have been placing bids during that last 1 minute and 20 seconds without Bidder D's knowledge. This scenario might result in Bidder D submitting her bid of $560 at 5 seconds prior to the auction closing, but the current high bid with 5 seconds to go before the auction closes is actually $595. Accordingly, Bidder D would lose that auction. Therefore, it would be advantageous if the web page of all bidders interested in the auction of a certain item or offering be updated either after a predetermined amount of time, or each time a new bid is placed on that item or offering.
Another problem with current auction systems is that the seller or auction house will set a date and/or time at which the auction will end. In order to aid the bidders to ensure that their bid is placed prior to the auction's close, the seller or auction entity may choose to display the time remaining during which bids will continue to be accepted by the auction entity. However, bidders will often wait until the last possible second to submit their bid. Doing so presents various disadvantages. For example, if a Bidder G waits until the last possible second to submit his bid, it might not be processed and accepted before the auction period ends. Accordingly, Bidder G will not have his higher bid accepted by the auction system, and loses the auction. Similarly, even if Bidder G's last second bid is accepted by the auction system, Bidder G might still lose the auction to Bidder H if Bidder H had previously submitted a proxy bid with a limit higher than Bidder G's last-second bid. Such an auction system which automatically ends and accepts no more bids after a certain point in time is also disadvantageous to the seller because she could have received a higher price for the item being auctioned if the auction had not ended until every bidder that wished to participate submitted their best and final bid and that bid was accepted.
A further problem is that existing systems do not provide intelligent offering management for traders or broker intermediaries. Traders require information not only about the buyers sellers and products, but about the likelihood that a buyer will bid on a product.
Therefore, it would be advantageous if an auction system existed which provided buyer bidding likelihood information to traders that was based on information about the buyer's behavior in the system relative to the products being offered.